Correlation Between Cartier Resources and Puma Exploration
Can any of the company-specific risk be diversified away by investing in both Cartier Resources and Puma Exploration at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cartier Resources and Puma Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cartier Resources and Puma Exploration, you can compare the effects of market volatilities on Cartier Resources and Puma Exploration and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cartier Resources with a short position of Puma Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartier Resources and Puma Exploration.
Diversification Opportunities for Cartier Resources and Puma Exploration
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cartier and Puma is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cartier Resources and Puma Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Exploration and Cartier Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cartier Resources are associated (or correlated) with Puma Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Exploration has no effect on the direction of Cartier Resources i.e., Cartier Resources and Puma Exploration go up and down completely randomly.
Pair Corralation between Cartier Resources and Puma Exploration
Assuming the 90 days horizon Cartier Resources is expected to generate 1.93 times more return on investment than Puma Exploration. However, Cartier Resources is 1.93 times more volatile than Puma Exploration. It trades about 0.06 of its potential returns per unit of risk. Puma Exploration is currently generating about 0.01 per unit of risk. If you would invest 7.00 in Cartier Resources on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Cartier Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cartier Resources vs. Puma Exploration
Performance |
| Timeline |
| Cartier Resources |
| Puma Exploration |
Cartier Resources and Puma Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cartier Resources and Puma Exploration
The main advantage of trading using opposite Cartier Resources and Puma Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartier Resources position performs unexpectedly, Puma Exploration can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Puma Exploration will offset losses from the drop in Puma Exploration's long position.| Cartier Resources vs. Antioquia Gold | Cartier Resources vs. Asante Gold | Cartier Resources vs. Antilles Gold Limited | Cartier Resources vs. Allegiant Gold |
| Puma Exploration vs. Aurion Resources | Puma Exploration vs. Rio2 Limited | Puma Exploration vs. Palamina Corp | Puma Exploration vs. Grande Portage Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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